US stocks gain despite job cuts, buoyed by Pfizer deal
By Vasilije Gallak on Jan 27, 2009 in Featured, United States
New York – A volatile session on Wall Street ended higher Monday, the markets buoyed by news of a 68-billion-dollar deal between pharmaceutical giant Pfizer Inc and its competitor Wyeth.
US companies announced tens of thousands of new job cuts on Monday as the world’s largest economy continues to battle through a serious recession, prompting another urgent call to action by President Barack Obama.
Caterpillar Inc, Sprint Nextel Corp and Home Depot Inc announced more than 70,000 job cuts, and even Pfizer said it would slash 19,000 jobs as part of the Wyeth merger.
Obama said the job cuts should instill Congress with a “sense of urgency” as they consider a 825-billion-dollar economic stimulus package, which has run into opposition from Republican legislators seeking more tax cuts and less government spending.
On the positive side, a key gauge of the US economy unexpectedly rose in December, the New York-based private Conference Board said Monday, attributing the increase to massive injections of cash into the financial system by the Federal Reserve.
The housing market at the heart of the US economic downturn also received a slight boost: Existing home sales unexpectedly rose 6.5 per cent in November, due to a record drop in prices of 15 per cent from a year earlier, the National Association of Retailers said.
The Pfizer-Wyeth deal, which will create the world’s largest biopharmaceuticals company, is one of the biggest takeovers in years and the most important one since the outbreak of the financial crisis. The last deal of comparable size was the AT&T-BellSouth merger for 70 billion dollars in March 2006.
The blue-chip Dow Jones Industrial Average gained 38.47 points, or 0.48 per cent, to 8,116.03. The Standard and Poor’s 500 Index climbed 4.62 points, or 0.56 per cent, to
836.57. The Nasdaq added 12.17 points, or 0.82 per cent, to 1,489.46.
The US currency fell against the euro to 75.603 euro cents from 77.07 euro cents on Friday. The dollar rose against the Japanese currency to 89.01 yen from 88.76 yen. (dpa)